The Great Financial Crisis decimated the balance sheets of most Americans.
How could it not?
Housing prices were down by nearly 30%. The stock market crashed almost 60%. The unemployment rate hit double-digits.
It was the worst economic period most of us have ever lived through.
The collective net worth of American households reached roughly $66 trillion by the end of 2007. The 2008 crash wiped out $11 trillion in wealth, falling to $55 trillion by early-2009.
Today, Americans are worth more than $154 trillion (and yes this is netted out for debts). We’ve gained $100 trillion over the past 15 years.
Since the first quarter of 2020, households have added $50 trillion in wealth.
This is a staggering amount of wealth created in such a short period of time.
These wealth gains have not been distributed evenly as this chart shows:
When asset prices rise, the people who hold the financial assets tend to see the biggest gains.
But this time around the bottom 50% has experienced extraordinary gains too:
While the stock market and overall net worth numbers bottomed in the first quarter of 2009, the net worth for the bottom 50% kept falling into 2011. From a high of $1.5 trillion before the crash, the net worth for the bottom 50% plunged all the way to $236 billion by Q1 of 2011.
The Great Financial Crisis basically completely wiped out the bottom 50%.
From there, it climbed all the way back to $1.9 trillion by early 2020, then went up another level during the pandemic, hitting a record of more than $3.8 trillion in the latest reading.
On a relative basis, the bottom 50% has seen the biggest wealth gains:
Stocks, housing prices, net worth, home equity — everything is at all-time highs and